Piracy is not a crime

The Business Software Alliance's (BSA) efforts are being thwarted by a three-decades-old law, as the organisation tries to clamp down on piracy and stop money leaking out of the economy.

As the law stands, end-user piracy is not a crime and is difficult to enforce as an infringement of copyright law. This law dates back to 1978 and the maximum fine that can be imposed on someone selling pirated software is R5 000 per ripped copy.

The BSA says this is not enough, and penalties need to be harsher in order to trim the amount of piracy in SA. The latest figures from the IDC show that piracy went up a percentage point in SA between 2007 and 2008, which amounted to R3.1 billion in industry losses.

ICT lawyer Lance Michalson, founder of Michalsons Attorneys, says piracy is a copyright violation, but it is not a crime. As a result, the owner of the copyright can only enforce a claim of copyright infringement.

The reason that piracy is not a crime, which makes offenders difficult to fine and penalise under South African law, is because there is no relevant law in place. This has been the situation for several years, he adds.

Under current law, Michalson explains, it is an offence to knowingly infringe a copyright, but many people who do this are not aware that they have. In addition, the will to prosecute people who rip off software is not a focus area for the authorities, he says.

On its Web site, the Electronic Law Consultancy spells out the issue: “The big secret is out: software piracy is not a crime when done for private or individual use, and the worst that can happen to the software pirate is he or she may be sued for the value of the licence he or she should have paid... Piracy is not theft, because theft is a crime, piracy is a copyright violation, and only under certain circumstances is this copyright violation a crime.”

Warren Weertman, at Bowman Gilfillan, who acts on behalf of the BSA, says the current Act does not sufficiently spell out piracy, and requires some interpretation in order to be enforced.

He explains that end-user piracy for personal use is not a crime in SA. If someone has pirated software for personal use, in most cases it is arguable that this does not amount to copyright infringement, Weertman says. “It would make life a lot easier if piracy was a criminal offence.”

Weertman says the legal firm is engaging government, and has been doing so for the past 10 years, to make piracy a crime. He says the Act has not gone through any real changes since its inception.

However, Weertman says, government has other priorities, such as violent crime. “We don't even have a draft Bill on the table.”

According to the IDC, trimming the piracy rate by 10 percentage points over four years would add an additional 1 181 IT jobs and $819 million to the economy. The IDC's research is, however, based on a 2008 piracy rate of 35%. These are the latest available figures, and numbers for 2009 should be out in two months.

BSA chairperson Charl Everton says the outdated R5 000 fine per pirated copy is “no deterrent to companies and does not set the right precedent on how SA views copyright”.

BSA was set up to protect the rights of its members, which include Adobe, CA, Cisco, Dell and Microsoft. The entity is present globally, and has an active – or 'online' – presence in SA. The organisation enforces its members' copyright on people found pirating software.

It is present in more than 80 countries, with dedicated staff in 11 offices around the globe: Brussels, London, Munich, Beijing, Delhi, Jakarta, Kuala Lumpur, Taipei, Tokyo, Singapore, and São Paulo.

Everton concedes that the BSA only enforces the law – with assistance from outside counsel – on behalf of its members, but argues that clamping down on piracy indirectly aids the entire industry.

“It's very challenging when the legislation is the way it is... It cripples our ability to enforce it in the market,” argues Everton. The BSA has been lobbying government for stricter laws for about a decade and is also working closely with other industry players, such as the Southern African Federation against Copyright Theft (Safact).

Everton says government can assist the BSA by making sure it enforces intellectual property laws internally. She adds that the issue of software piracy needs continued enforcement and education.

James Lennox, CEO of Safact, says the courts are not imposing strict enough penalties and, even if legislation had penalties that were sufficient to deter criminals, it is not a given that these would be handed down.

However, Safact, which represents the broader industry and has members including Nu Metro, Ster Kinekor and Sony, is making progress in getting counterfeiting cases to courts and having perpetrators found guilty, he says.

Lennox says legislation has not kept pace with technological changes, and needs to be updated. SA also needs to ratify various treaties that it has signed, and this will require changes to the law, he adds.

Piracy does not just impact the economy directly through lost jobs and revenue. eBlockwatch founder Andre Snyman says he has heard anecdotal tales from tracking companies that they find pirated DVDs in the same chop shops as hijacked cars being cut up for resale.

Everton confirms this, saying there is a correlation between counterfeit goods and organised crime, with pirated copies providing operating cash for the rest of the syndicate.

Weertman adds: “There is a whole knock-on effect on the economy... assuming everyone purchases legal software and does not use open source.”